Introducing the Validation Agent Framework

The Validation Agent Framework empowers banks to leverage their KYC, AML and other regulated business-as-usual onboarding processes, to obtain an LEI for their customers during initial onboarding or a standard client refresh update. In other words, banks acting as Validation Agents can liaise with the LEI Issuer on its client’s behalf to ‘validate’ key identity data, such as the legal name and business registry information, confirming that these checks and processes have already been performed.

Enhanced customer experience and market differentiation

A bank in the Validation Agent role can benefit from a greatly streamlined and cost-effective LEI issuance process for clients, resulting in a faster and more convenient client experience in onboarding and lifecycle management. The removal of process duplication also means less time and resource investment needed from their client which, ultimately, reduces the time to trading revenue.

By acting as a Validation Agent, banks also have additional opportunities to add client value and achieve market differentiation. They have, for example, the chance to pioneer new, revenue-generating digital services in areas enabled by the LEI – from corporate identity management to legal assurance level e-signing with digital certificates.

Leading the way in identity management

Although the Validation Agent Framework will initially appeal to FIs seeking to streamline regulatory compliance processes for their clients, the role is designed to foster broader appeal among banks and to encourage voluntary LEI adoption outside of capital markets.

Validation Agents can leverage the LEI and eliminate manual linking of entity data from disparate internal and external sources. McKinsey estimates that this alone would save the global banking industry USD 2-4 billion per annum by improving full time employee productivity in client onboarding.

By expanding LEI issuance beyond legal entity clients that require an LEI for financial compliance, a Validation Agent can equip its whole business client base with globally recognised identities, which can be used across borders with any legally registered counterparty or supplier around the world.